Paramount Maintains Earnings Stability Despite Lower Revenue, Backed by RM1.47 Billion Unbilled Sales

Paramount Corporation Bhd delivered resilient first-quarter results for the period ended March 31, 2026, maintaining stable profitability despite a significant decline in revenue. The performance demonstrates the strength of the group’s property development portfolio, disciplined project management, and sizeable unbilled sales pipeline that continues to support future earnings visibility.

While revenue fell due to fewer project launches and slower construction-stage revenue recognition, the company remains financially strong, supported by healthy operating cash flow, ongoing landbank expansion, and a robust development pipeline.

Stable Earnings Despite Revenue Decline

For 1QFY2026, Paramount recorded:

• Net profit of RM14.4 million, largely unchanged from RM14.43 million a year earlier.
• Revenue of RM152.2 million, down 29.7% from RM216.5 million.
• Profit before tax of RM18.6 million, a decline of 17.7% from RM22.6 million.

The lower revenue was mainly attributed to:

• Fewer ongoing projects contributing to earnings.
• No new project launches during the quarter.
• Slower revenue recognition from projects still in their early construction phases.
• Softer market demand amid geopolitical uncertainties and cautious buyer sentiment.

Despite these challenges, Paramount successfully preserved profitability, highlighting the resilience of its business model.

Property Development Remains the Core Earnings Engine

The property division continued to be the group’s primary profit contributor.

During the quarter, the segment generated:

• Revenue of RM140.1 million.
• Profit before tax of RM22.6 million.

Although revenue declined by 31.9% year-on-year, management explained that the slowdown was largely due to project timing rather than weak demand.

Large high-rise developments typically recognise more revenue during the middle and later stages of construction, meaning current earnings do not necessarily reflect underlying sales performance.

The main projects contributing to earnings during the quarter were:

• The Atera, Petaling Jaya.
• Bukit Banyan, Sungai Petani.
• The Ashwood, Kuala Lumpur.

Sales Remain Healthy Despite No New Launches

A key takeaway from the results is that Paramount continued generating property sales despite not introducing any new projects during the quarter.

Sales achieved RM152 million in gross development value (GDV), supported by:

• The Atera, Petaling Jaya.
• Bukit Banyan, Sungai Petani.
• Sejati Residences, Cyberjaya.
• Commercial units at Atwater, Petaling Jaya.

Unlike the corresponding quarter last year, which recorded RM62.4 million in new launches, Paramount adopted a more measured launch strategy in 2026, choosing to defer major launches until market conditions improve.

The Ashwood, one of its flagship luxury developments in Kuala Lumpur, became fully sold during the quarter, contributing only minimally to current sales as available inventory was exhausted.

RM1.47 Billion Unbilled Sales Provide Strong Earnings Visibility

One of the most encouraging aspects of Paramount’s results is its substantial unbilled sales position.

As at March 31, 2026, the group held RM1.47 billion in unbilled sales, consisting of:

• RM1.276 billion from the Central Region.
• RM198 million from the Northern Region.

This represents sales already secured but not yet recognised as revenue, providing a strong pipeline for future earnings and cash flow generation as construction progresses.

The sizeable unbilled sales balance should help cushion the impact of slower market conditions in the near term.

Coworking Expansion Continues Despite Near-Term Losses

Paramount’s coworking business, operated under the Co-labs Coworking brand, remains in expansion mode.

The segment recorded:

• Revenue of RM4.7 million.
• Loss before tax of RM0.8 million.

The weaker performance was largely due to:

• The absence of design-and-build income previously contributed by Scalable Malaysia.
• Additional operating costs associated with newly opened coworking facilities.

During the quarter, Paramount expanded its footprint through:

• Its first coworking outlet outside the Klang Valley at Mid Valley Southkey, Johor Bahru.
• A new single-tenant workspace at KL Eco City.

The company is also preparing to launch a hospitality-oriented coworking concept, with its flagship location expected to open at Sunway Square, Subang Jaya, in mid-2026.

While profitability remains limited today, management is building a recurring income platform that could contribute more meaningfully over the longer term.

Investment Segment Shows Improvement

The investment and other businesses division delivered a stronger performance.

Revenue increased by 11% to RM8.1 million, while losses narrowed significantly from RM7.9 million to RM3.3 million.

The improvement was driven by:

• Better performance across various business units.
• Contributions from newly acquired associate Envictus International Holdings Ltd.

This demonstrates Paramount’s efforts to diversify earnings beyond property development.

Major Launch Pipeline Planned for Second Half of 2026

Rather than launching projects aggressively during uncertain market conditions, Paramount intends to focus most of its launches in the second half of 2026.

Upcoming projects include:

Kulim Development, Kedah

A new project targeting demand generated by the continued expansion of the Kulim Hi-Tech Park ecosystem and semiconductor-related investments.

Section U9, Shah Alam

A new landed residential development targeting owner-occupiers and upgraders in the Klang Valley.

U-Thant Enclave, Kuala Lumpur

Two blocks of luxury serviced apartments that will build on the success of:

• The Ashwood.
• The Atrium.

Both developments have already achieved full sales, giving confidence for future launches in this prime Kuala Lumpur address.

Landbank Expansion Supports Long-Term Growth

Paramount continues to strengthen its future development pipeline.

As at March 31, 2026, the group owned:

• 617.2 acres of undeveloped land.

In addition, five land acquisitions are pending completion, which would add:

• 78.3 acres.
• Approximately RM3 billion in future GDV.

The expansion reflects management’s confidence in long-term demand despite near-term market uncertainties.

Strong Operating Cash Flow Highlights Financial Strength

One of the strongest aspects of Paramount’s quarter was its cash generation capability.

The group recorded:

• RM128.8 million net cash inflow from operating activities.

This compares favourably with a net operating cash outflow of RM2.6 million recorded a year earlier.

As at March 31, 2026:

• Cash and bank balances stood at RM321.9 million.
• Total borrowings increased to RM1.28 billion.

The higher debt level was primarily used to fund:

• Strategic land acquisitions.
• The acquisition of a 28% stake in Envictus International Holdings.
• Sukuk refinancing exercises.
• Expansion of the development landbank.

Conclusion

Paramount’s 1QFY2026 results demonstrate that the company remains fundamentally strong despite operating in a more cautious property market environment. While revenue declined due to fewer launches and project timing effects, earnings remained stable, supported by profitable property developments, strong operating cash flow, and prudent cost management.

The group’s RM1.47 billion unbilled sales balance, expanding landbank, strategic investments, and upcoming launches in Kulim, Shah Alam, and Kuala Lumpur provide a solid foundation for future growth. Combined with healthy cash generation and a disciplined launch strategy, Paramount appears well-positioned to navigate current market uncertainties while capitalising on opportunities when buyer confidence improves.